Consumers love to talk about the stocks that have increased in value exponentially. Very few actually participate and make a lot of money in these situations. But most of us cannot time the market, may be afraid to get involved in the market or just do not have the time to monitor investments like these. So what are consumers going to do, in order to make the best short term investments for them? It is actually quite simple. If you look at the debt that you currently have and you focus on paying the highest interest debts first you will actually be making a very good investment.

Best short term investments

Let’s talk about credit card debt for a moment. The interest-rate on unpaid balances of credit card debt is typically 21% or even higher. Sure there are some credit cards that offer 7% or 10% for a short period of time. But if you carry the debt beyond that grace period, they quickly jump to 21% or higher. Now if you pay that debt off you are actually paying yourself a 21% interest-rate on any amount that you pay off. That is much better than anything you will get on average in the stock market.

Even if you have a car loan at 5%, or a personal loan at seven or 8%., most people will save themselves that interest by paying off the debt early. When the debt is repaid you have even more cash flow to utilize to pay off either debt or to buy some of the things that you really would like to have, or to set aside money for future expenses that will be of an emergency nature.

Once you have all of your debt repaid the next area of your focus is to save some money for emergencies that always show up at the worst times, and to pay yourself long term for retirement. Invest your retirement savings well, diversified, and in secure investments to ensure that your savings will be there in the long term and generate the kind of income you need when you do finally retire.